Google ,Apple and the failure of Open.

Companies Turn to Software for Differentiation

Since software and platforms are increasingly becoming more important and hardware has more or less standardized, the Open vs. Close battle has taken center stage in the industry. The Open source initiative lists ten preconditions for a software to be characterized as open : The software must be free to distribute ,the source code must be available ,modifications to the software must be allowed, the software license must not discriminate among individuals or groups, the license rights must apply to all who receive the software via redistribution and the license must be ‘technology neutral’, i.e. there should be no specific benefits in the license for a particular technology or interface. Closed software is essentially the opposite of this and it is strictly licensed with severe restrictions on who can edit the code. The open philosophy states that software should be available to all and that innovation and progress is only made when everyone has a chance to work on the code directly. It is against centralized authority and claims that closed software leads to a lack of ingenuity and innovation. However if we look beyond the idealistic façade and conduct genuine research we realize that although open platforms drive innovation, in the end user satisfaction is more achievable when closed systems are used because they are easier to develop for, allow for robust software distribution, are far more secure, much less likely to be pirated, offer tremendous value to businesses and provide the seamless integration which insures a quality experience.

Developers Challenged and Confused.

Open platforms are always cited as a pain to write code for by software developers. Defenders of the open philosophy often claim that ‘openness’ promotes ‘freedom’ and ‘deregulation’. While this is true, this can be a double edged sword as developing for such an extensive and broad environment can often become a nightmare. In today’s industry there is a large variety of software but the more prominent ones belonging to the open camp are Linux (a computer operating system) and Android (Google’s mobile operating system) whereas the likes of Microsoft, Apple, Blackberry (formerly known as RIM), IBM and Nokia have shown their support for the closed environment by making more of their software closed. Mac OS, Windows, iOS, Windows Phone, Blackberry OS and Symbian (until it went open a few years ago) are all examples of massively successful closed systems. A measure of success is the variety of software available for your product and developers are more likely to develop for a platform with more uniformity and standards, instead of something that has innumerable variations and versions (Open software). To look at this in more detail consider the relative ease of development on iOS and Windows Phone compared to Android. Developing for Android is more expensive because Android runs on a million different smartphones with different specifications. The fragmentation that accompanies open systems makes it very hard for the developer to test that his application works on each and every one of those devices. This leads to applications working well on some devices and not so well on other devices. Compare this with iPhone ,where Apple produces devices which run the same OS version and have very similar processor architectures, the developer just has to compile and debug his code for one device and be fairly certain that it will run on all ios devices. According to the reputable market research firm IDC, devices running Android shipped 159.8 million units, more than three times the amount of devices shipped running ios in Q4 2012. Even though Android ships way more devices than iOS, developers still prefer Apple’s platform because of the ease of development and debugging that it offers. Many premium titles are thus unavailable on Android because it is just too hard for quality conscious developers to test their software on each and every different android version. According to premier tech website “The Verge”, the developer of Infinity Blade (a sophisticated iOS gaming title with cutting edge visuals and rendering engine) dispelled any thoughts of an Android version for the game hinting at severe android fragmentation and difficulty in testing. The situation is so bad that some developers have to test as many as four hundred different devices for application compatibility. Yat Sui, CEO of a Hong Kong based Android developer explains that his studio has detected over 600 different types of android devices running their application. He expresses displeasure and says: “We haven’t managed to track down all of those devices because, in large part, they are no longer available for sale.” Clearly, closed is the way to go if you are serious about quality software.

Software is a pain to distribute for Open Systems.

The pain of developing for the open source doesn’t end there. Not only is making software harder for an Open Operating System ,getting it in the hands of consumers can be tricky and developers find it hard to monetize their software on Open Platforms. Since the open philosophy is so against a central regulatory authority, there really isn’t a unified distribution model for Open. Technology geeks and enthusiasts might value this as they consider ‘side loading’ , a practice of loading Apps without the manufacturer’s approval to be ‘cool’ and ‘liberating’ ,the casual consumer is often left confused. Consider Android once again. While iOS has just one unified Application store which Apple calls the “AppStore”, Android doesn’t have unified distribution model and developers must submit their apps to each and every different android application store to ensure it’s available to the maximum number of consumers. On Android there is Google’s own Play Store, Amazon App store, Get Jar app store, Yaam store and app poke to name just a few. In real world terms, this might seem beneficial because a large number of software stores guarantees a large number of available applications but software works differently. Each of these stores has their own, slightly different content policy, and developers must be fully aware of it unless they want their app rejected. Compare this to a closed environment (Apple’s iPhone), where there’s only a single Application Store with straightforward app development guidelines and you can easily see which choice is better for the developer. Even Microsoft has now adopted this distribution model with the launch of the Windows store in Windows 8.Since Apple’s distribution platform is so integrated with its devices, developers make much more money selling their titles on the Apple’s AppStore compared to Google’s Play-Store. This huge disparity of revenue is highlighted in a report by Application Analytics firm Appannie. The company doesn’t reveal complete figures because it sells them separately but it reveals that even though the installed user base of Android far outstrips the user base of ios ,Apple’s application store pulls in over 3.5 times more revenue than Google’s play store. Market analysis and strategy firm Vision Mobile conducted a survey of 1500 software developers in 2012 and revealed that iOS developers earn about 3700 American dollars per Application compared to Android developers earning a significantly lower 2700 American dollars per application per month. The fact that software developers earn more money on iOS even though it has less than half the installed base of Android speaks volumes about how a closed integrated approach to software distribution is much better for the developer and the consumer.

Open is often Open to Malware

As software is automating more and more of our lives, the issue of security has become very pertinent in the last few years. Open software apologists often claim that ‘Open’ is more secure simply because the source code is available to everyone to view. The argument is that if more people look at the code, they are likely to find more flaws in it and hence more of them will be corrected. The argument is very simplistic and naïve simply because it puts too much faith on the person viewing the software. If a malicious person looks at the software, he’s more likely to document the vulnerability and keep it to himself instead of informing the software provider. The situation for Open software is a Win-Lose one depending on the individual/s who discover the software security flaw. However, the source code is under strict licensing when the system is closed and the code isn’t really available for everyone to view and is encrypted. Throwing the code out into the market doesn’t guarantee security because according to the head of Microsoft’s security response team: “"The vendor eyes in a security review tend to be dedicated, trained, full time and paid”. It is evident that a group of qualified researchers and software engineers hired by the software vendor will clearly be better at finding security holes in the code compared to voluntary tech enthusiasts who often do this job for Open Software. Since Open software prioritizes design and development, it leaves little room for testing which is expensive and boring. A consequence of this approach is that hackers/crackers often find security flaws in open software and use them to steal data, passwords and other sensitive information. Research conducted by security firm Trend Micro reveals that Blackberry (another closed platform) is the most secure mobile platform as of 2012 , followed by iOS ,Windows Phone and at last Android (the only open platform in the competition). The existence of security holes is one thing, rectifying them can also be a nightmare on Open sourced platforms like Android. Companies often patch newly discovered security vulnerabilities by pushing periodic updates to the software. Doing this is extremely hard on an Open platform because of the variety of versions of software running on thousands of different devices and critical new security updates are often unable to be installed. The Android developers dashboard reveals that there are eight different versions of Android software currently in the market. Out of this the latest version, Android 4.1/4.2 Jelly Bean runs on just under 14% of the user base and a two year old Android 2.3 Gingerbread runs on 45% of the devices. So if Gingerbread has some security flaws and Google releases and update to fix those, the end user will not necessarily get that update, simply because the massive installed base of Android has so many different devices that even the software maker ,Google , can’t really insure compatibility with every one of them ! According to data provided by Chitika Analytics, Apple’s latest iOS 6 operating system accounted for nearly 85% of the entire installed base. The reason Apple is able to get such fast adoption is because its model is closed and integrated. Apple’s software is optimized for only a few select devices (iPhone and iPad) and this model allows the company to push timely updates and quash security bugs as quickly as they appear. Not only is closed more secure , but deploying closed software is also much more efficient and much less time consuming.

The Cheap Crowd Chooses Open

A crippling consequence of lax security on open systems is software theft or piracy. Pirating software involved ‘cracking’ the software’s security protocols and then distributing the paid software for free. The practice is crippling for the software industry and takes away the developer’s motivation. Once again, we compare the two premier operating systems in the industry, Apple’s closed iOS and Google’s Open Source Android. Although both iOS and Android have had massive issues with people stealing software, the problems aren’t nowhere near as bad on iOS as they are on Android. When a piece of code is to run on Android or ios ,the OS checks if the code is ‘signed’ by the valid distributor ,this allows the Operating System to determine if the executing code is a valid and licensed copy instead of a pirated one. Since Android’s security protocols are so easy to bypass, and Android manufacturers are ‘morally barred’ from using tight security to prevent root access, users often gain easy access to the system partition. This allows them to run unsigned code and hence pirate/steal any number of Applications that they desire. A somewhat similar process on ios is referred to as ‘Jailbreaking’, the procedure involves gaining access to the root partition on ios and altering the OS to allow it to run unsigned code. However, ‘Jailbreaking’ an ios device is significantly more difficult compared to ‘rooting’ an Android device because Apple implements very stringent security checks in its OS. The latest Jailbreak for ios 6 took months to complete and according to Forbes it is “the most elaborate jailbreak to ever hack your iPhone.” Apple promptly patched the jailbreak with an update. Compare this to Android, where rooting guides for devices are available even before they are available on the market and the manufacturers often turn a blind eye to the practice. The end result of this is there is huge software piracy on Android compared to ios. Piracy rates for one Android Application “Facefighter” were 70 pirated copies to 1 legitimate copy, compared to 3 pirated copies to 1 legitimate copy for the same application on iOS. The developer of the App was quoted as saying: “That’s crippling.”

The plague of Windows era PC malware has now moved into the mobile space and that is squarely due to the implementation of Open Platforms such as Android. Proponents of the Open ideology often condemn the ‘Walled Garden’ approach of closed platforms, terming them restrictive and against freedom. This does has some truth to it as companies using the ‘Walled Garden’ approach often reject certain apps arbitrarily but that is still far better than allowing the Spyware and Malware onto a mobile platform. Apple’s closed approach means that it thoroughly checks each and every application submitted to the AppStore before approving it for iOS devices, this ensures that the majority of malicious applications get rejected from AppStore. iPhone/iPad users don’t need to worry if a certain App might be malicious because all apps are prescreened. This isn’t the case with Android. Since the open philosophy is so anti-regulation, Google does not properly screen applications submitted to its playstore and most applications often become immediately available after submission. The downside of this approach is that it makes it very easy for malware to get onto android devices and according to a recent report by security firm McAfee, a staggering 97 % of all smartphone malware is found on Android! The rest of the 3% being shared between ios and other mobile platforms.

What's better for your Business ?

It’s easy to grab huge chunks of the market by distributing free open source software, but it doesn’t really make for a good business model. In 2007, Apple introduced the first iPhone and it didn’t just change Apple, it changed the whole cellphone industry. In an attempt to prevent Apple from gaining too much control, Google promptly released Android and made it open source. This meant that manufacturers like Samsung and HTC who lacked the software to compete with Apple suddenly got a free OS to put onto their phones. As android based phones flooded the market, Android quickly dethroned iOS as the market share king and according to Market research firm Strategy Analytics: 70% of all smartphone sales in Q4 2012 were of Android based smartphones. This is hailed as a great victory and an example of how ‘Open always wins’. However, there is absolutely no relation between financial success and market share. Quarterly analysis by Market research firm Cannacord revealed that even though Apple had about 10% of the Global smartphone market share, it’s profit share was 73% as of Q1 2012 with Samsung grabbing 26% and the rest 1% being distributed among other companies, Apple’s closed and vertically integrated approach allows it to sell it’s hardware and software as a cohesive unit. The closed model of tying iTunes (music) with fixed hardware (iPod) made Apple the dominant player in the music industry ,similarly with IOS , Since all of Apple’s software services are integrated with its devices, the company’s closed model is causing all of its services to grow in tandem as device sales skyrocket. Thus the closed model causes revenue growth across the spectrum for those who play their cards correctly while Open modeled companies make low margins on their products and brawl for market share which is pretty much insignificant.

What's best for the Consumer ? Integrated or Fragmented?

The success or failure of any specific approach ultimately depends on a variety of factors. Open Software no doubt stimulates innovation, since it makes itself available to anyone who desires it. However, it is also worth noting that one of the most innovative platform in consumer electronics history, Apple’s iOS, is closed source. Although ‘free’ and ‘unrestricted’ idealism attached with Open software seems attractive, in the end Open fails to deliver where it really matters. It is a pain to develop for ,makes efficient distribution a nightmare , lacks premium quality software ,is riddled with security holes and malware, makes for a poor business model and fails to offer the integration of services that today’s consumer demands. There is tremendous value in the software provider being the systems integrator as opposed to the user being the systems integrator. When selling to consumers who want their devices to just work, integrated will always trump fragmented. Closed will always trump open.